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Re: Outrun Collectibles - New Pre-Orders and In Stock
Dear customers of Outrun Collectibles,
We had hoped to secure a deal that would have allowed us to fulfill remaining orders, exchanges, and refunds that are outstanding. Unfortunately, all offers for someone else acquire the business fell through last week, which has left the company fully insolvent and on the path to bankruptcy. This may be the last chance to explain how we got here, so I’m going to take the opportunity to explain how everything transpired.
Between July and September 2022, 4 major things happened that caused the business to end:
- Several months worth of products that were set to be released in the future all released at once. We went from spending $2000-$4000 a week on inventory to that amount every single day. In July alone we paid out $90,000 in preorder inventory costs, which was more than we had spent in the previous 8 months combined. The regular cadence of the releases were not followed in any way, and we even had products that were due to arrive spring/summer of 2023 come out at that time as well.
- Sales dipped dramatically during this time as well due to recession fears and preorder fatigue, which caused us to drop to about 25% of sales that we had done in previous months. Hasbro’s price raises and changes to their packaging also was a major contributing factor, which we have only started to see the fallout from. We were forced to pay a higher price for most preorders that were already placed, but we had decided to absorb that additional cost rather than cancelling orders.
- We had a massive amount of preorder cancellations happen. Between June-August we had over $20,000 in cancelled preorders. This was money that had to be returned, and worse, we still had to pay for all of those orders from our distributor because we had zero option to cancel them. With most distributors, if you do not pay for several items, they just won’t send you any more items.
- Rising shipping costs. As you’ve seen, most stores had to raise their Free Shipping threshold. I can tell you with absolute certainty that this area is where most stores are losing money consistently. Canada’s shipping rates have always been bad, and we always had to factor them into the cost, but the cost to ship a package almost doubled at this time. Since most orders would be fulfilled at a later date, we couldn’t retroactively charge more for shipping.
I had also rolled my ankle while crossing the street at this time, which caused a major tendon in my foot to displace itself. I’m currently having to be extremely cautious with my foot until the surgery as any excessive activity can cause it to tear, resulting in lifelong mobility issues. This was the deciding factor in closing the store, as there is no way to continue operations during that recovery time.
I know I’m leaving with a lot of people upset and even hateful towards me, and I have to manage and live with that, because I’m unfortunately out of options. I’m sorry I couldn’t have done better. This will be my final sign-off and this email will be closed after this has gone out. Thank you to all who supported us.
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